PayPal (PYPL) Strengthens Payment Solutions With Latest Move
PayPal PYPL has bolstered its tie-up with Apple AAPL by introducing the option to add PayPal and Venmo credit or debit cards to Apple Wallet.
By adding cards to Apple Wallet, PayPal and Venmo, customers can use Apple Pay on iPhone, iPad and Mac to make fast and convenient purchases in apps or on the web in Safari.
Customers can now make in-store or online payments securely via Apple Pay with a simple tap of their iPhone or Apple Watch.
Users can continue earning the same cashback and rewards with the new option. More precisely, they will earn a 2% cashback while making payments through Apple Pay using a PayPal Cashback Credit Card.
Currently, the underlined option is available only for adding PayPal credit and debit cards to Apple Wallet. It will be available for PayPal Business Debit Card and Venmo credit or debit cards in the coming months.
We note that the latest move is likely to strengthen the adoption of PayPal payment cards, thanks to the growing popularity of Apple Pay, Apple watch and iPhones.
This, in turn, will likely accelerate PayPal’s transaction revenues in the days ahead, which in turn will drive its top-line growth.
In second-quarter 2023, transaction revenues amounted to $6.6 billion (90% of net revenues), up 5% from the year-ago quarter’s level.
For 2023, our model estimate for the same stands at $26.7 billion, reflecting year-over-year growth of 6% from 2022.
PayPal Holdings, Inc. Price and Consensus
PayPal Holdings, Inc. price-consensus-chart | PayPal Holdings, Inc. Quote
Expanding Payment Solution Offerings
Apart from its latest move, PayPal recently introduced Tap to Pay on Android for Venmo and Zettle users to empower small businesses with seamless payment options.
It strengthened its payment solution offerings for small businesses by adding new features. The features allow small businesses to accept payments made through PayPal, credit and debit cards, digital wallets, Venmo, PayPal Pay Later and Apple Pay.
The company’s Passkeys for Android devices, which deliver a secured log-in and password-free, safe payment experience, remain noteworthy.
PayPal's subsidiary, Xoom, introduced Debit Card Deposit, which allows U.S. customers to conveniently and securely send money directly to friends and family’s eligible Visa debit cards. It is available in 25 countries.
PayPal enables Venmo users to transfer cryptocurrencies to friends and family seamlessly.
We note that the growing portfolio offerings will continue to drive PayPal’s customer momentum in the near term.
Wrapping Up
PayPal’s increasing interest in the expansion of its payment solution offerings has been playing a vital role in strengthening its presence in the booming online payment industry.
Per a report from Statista, the digital payment market is expected to hit a transaction value of $9.46 trillion in 2023 and reach $14.78 trillion by 2027, registering a CAGR of 11.8% between 2023 and 2027.
The growth prospects of the company in this promising market are likely to continue driving its financial performance in the near term. This is likely to aid the company in winning investors’ confidence in the days ahead.
However, the company has been suffering from intensifying competition in the digital payment market, which poses a serious risk to its market position. Foreign exchange headwinds remain a concern.
PYPL has lost 17.7% in the year-to-date period against the industry’s growth of 45.3%.
Zacks Rank & Stocks to Consider
Currently, PayPal carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Asure Software ASUR and Arista Networks ANET. While Asure Software sports a Zacks Rank #1 (Strong Buy), Arista Networks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Asure Software shares have gained 4.4% in the year-to-date period. ASUR’s long-term earnings growth rate is currently projected at 27%.
Arista Networks shares have gained 52.5% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.75%.
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